Russia promises to increase oil exports, questions remain

by news roundup, originally published by The Russia Journal
| May 30, 2004

Russian Finance Minister Alexei Kudrin promised to boost oil exports if world prices remain high. The promis comes just days after reports that Russia does not have the infrastructure to increase production. Two articles from The Russia Journal

MOSCOW - The capacity of Russia’s oil export has almost reached a ceiling and a slight boost is possible only on the Baltic Sea and by using a ChevronTexaco pipeline.

According to Russian pipeline monopoly Transneft, Russian exports and even domestic supplies have faced the obstacles ever due to booming output.

In the opinion of Russia’s energy minister Victor Khristenko, further options of increasing exports depend mainly on the Baltic Pipeline System, because all other options have been exhausted.

The Baltic Pipeline System links fields in Western Siberia to Transneft's flagship Baltic port of Primorsk. The firm wants to expand it to one million bpd by the end of 2004 from the current 850,000 bpd and is waiting for government approval to expand it to 1.25 million bpd.

CPC, the only major private pipeline on the territory of the former Soviet Union, is designed by Chevron to pump Kazakh crude to the Russian Black Sea port of Novorossiysk. The Russian state and several Russian private firms have stakes in the CPC, but have not used them so far to ship their barrels.

MOSCOW - Russia said it will raise its oil export volume if oil prices remain high, and, at the same time, to keep pumping at the same rate even if prices fall.

Finance Minister Alexei Kudrin said on Saturday.

"If oil prices remain high we will boost production and exports. If prices come down again we will not create artificial obstacles for world economic growth by cutting exports," Russia’s Finance Minister Alexei Kudrin told in interview to a Russian radio.

Kudrin's remarks come three days after President Vladimir Putin said Russia should expand export capacity and approve new routes.

Russian production has jumped 50 percent to 9.0 million barrels per day since 1999, but pipeline export capacity has peaked at 4.0 million bpd.

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